Mass confusion about vaccines. Enough small business owners scrambling for state cash to crash a website. Contentious battles over COVID-19 reopening rules and getting kids back into classrooms.
All in a day’s work for Dee Dee Myers.
As 2020 came to a chaotic close, the former Warner Bros. communications executive and the country’s first female White House press secretary took over California’s faltering economic response to the pandemic. Myers joined as a senior adviser to Gov. Gavin Newsom and director of the Governor’s Office of Business and Economic Development after predecessor Lenny Mendonca resigned, a high-profile recovery task force dissolved and Newsom tried to regain credibility after attending a lobbyist’s birthday party at the French Laundry.
In an interview edited for length and clarity, Myers spoke with CalMatters this week about navigating reopening conflicts, the state’s evolving COVID-19 recovery plan and why she doesn’t fear Elon Musk’s move to Texas.
Q: You started this role leading the state’s business and economic development efforts in December, right as new stay-at-home orders went into effect and the virus surged again. How did you come in and start to prioritize relief efforts in that environment?
A: I started on Dec. 15, so I did walk into a difficult situation that was yet more difficult. There was already work ongoing. The governor and the Legislature had announced at the end of November that they were going to stand up this $500 million small business grant program. It opened on Dec. 30.
At the same time, the governor and team were working on his budget, which also prioritized economic recovery more broadly. That included another round of spending on small business grants, which we’re continuing to discuss with the Legislature. It included other incentives — tax incentives, regulatory relief, other things to continue to support small businesses.
And then there are other programs, too. You know, vaccine distribution is a business-important program, right? Investments in higher education. A lot of people in economically difficult times go back to school. Job training programs. And the Golden State Stimulus, which will put $600 into the hands of millions of Californians. So all of those programs working together. And by the way, adding another dimension: education. Reopening schools has also been a priority.
Q: The second round of applications for the state’s COVID-19 small business relief grant program closed this week, and we know there were more than 330,000 applicants in the first round. How intense was the demand this time, and how much concern is there about having enough money to go around?
A: Anyone who completed an application but didn’t get a grant in the first round was automatically rolled forward into the second round. We don’t know yet what the final number will be. Grants will start going out later this week, and that will continue to roll out.
There’s obviously substantially more need than there is money at this point. The two rounds together, round one and round two, will be roughly $500 million. The governor had proposed another $575 million. I think the Legislature and the governor working together will provide substantially more than that, and we’ll see where it all lands.
Q: When it comes to the state’s reopening rules, we’ve also seen several lawsuits from businesses like salons, gyms and breweries that say the rules are too arbitrary. Do you see a scenario where those industry-specific rules change as vaccines roll out, or what’s your response to those concerns?
A: Yes. There’s so many things that have made this challenging. It’s unprecedented, it continues to change. We haven’t been operating on a static playing field. It’s a three-dimensional kind of thing where the rules change on everybody every day. That said, we will definitely try to evolve our guidance as we go forward and as circumstances on the ground change, as more people get vaccinated, as we see what happens with infection rates and other metrics.
I think on the one hand, people feel relieved to see a substantial drop in infection rates. On the other hand, there are these variants out there that are big wild cards, so nobody wants to take their foot off the brakes of social distance, wear your mask, don’t mix, be smart. So that will continue, but I mean look, ideally we want to open the economy as quickly as it’s safe to do so. The state’s and the governor’s strategy has always been health first. Until you get the pandemic under control, you can’t fully open the economy.
At the same time, the idea has always been to open what you can as soon as it’s safe. As the metrics change and things become safer, we will continue to open more businesses, and you’ve seen the dialogue around schools. The final details of that need to be negotiated with the Legislature and teachers, but hopefully we’ll be able to move toward more reopening of schools, which will ease pressure on working parents.
Q: I did have a question about schools. I mean, you wrote the book on “Why Women Should Rule the World,” but with so many schools still closed, we’re hearing anecdotally about more women being forced out of the workforce. Are there any concrete ways the state can address or reverse that impact?
A: Yeah, it’s something we’re very concerned about. You saw last week as the federal government announced the new unemployment numbers, there was like a fivefold impact on women leaving the workforce or losing jobs. I think that’s why there are a lot of supports in the programs that we’ve already rolled out. The small business grants targeting women, reopening the schools to help parents.
One of the priority areas for the grant program is day care. It’s very hard for parents that do want to go back to work to find day care if they have younger kids who aren’t in school. I do think we’ll continue to discuss, as we come through this, how do we get people back to work, including women who have been disproportionately impacted and industries that have many women in them, like care work? How can we support their return to work in a safe and equitable way? There’s a lot to do going forward on that.
Q: On the issue of going back to work, you said when you started that “job one is distributing that vaccine.” The state has moved toward age-based vaccination after essential workers. So how are you communicating with businesses about when employees might be able to go back in person, versus this bigger issue of how much remote work might continue?
A: That’s going to be a sector-by-sector, business-by-business kind of decision. We’ve already seen just in the kind of anecdotal response that there’s a range. Some businesses are saying we can’t wait to get back to everybody being together. Others are saying it’s up to employees. Many are somewhere in between. That is definitely going to affect just the way work works going forward. I don’t think any of us know at this point how it’s going to look.
In the meantime, job one is to get everybody who wants a vaccine vaccinated. And to encourage everyone to want one — working with employers so that they will encourage their workers to get vaccinated, making sure they have time off if that’s what they need. There will be some on-site vaccinating. We’re still trying to figure that out. The bottleneck continues to be the supply of vaccine.
Employers will have to decide whether they want to require a vaccine for people going back to work. I don’t think that’s a state question. At least it’s not so far. It’s going to be interesting. It’s accelerated things that were happening in the economy by, like, five years.
Q: For people out of work, long unemployment delays continue to be a problem, and the state is just starting to confront $11 billion and counting in unemployment fraud. On the business side, we obviously have to think about the state unemployment fund paid for by employer taxes. Who is ultimately responsible for ensuring that workers are made whole and the state’s unemployment fund is sustainable?
A: You know, that’s not a conversation that I’m involved in right now, but I do think it’s one that’s important.
Q: Two other big labor shifts during the pandemic were the explosion of delivery services, then voters approving Proposition 22 to revert on-demand workers to independent contractors. At this point, are you involved in conversations about potential federal changes on this issue, or what does the administration see as the path forward on gig work?
A: That’s an ongoing conversation, and it’s not one I’ve been super involved in in the midst of the pandemic. But what is a quality job? What kind of benefits should they attach to the job? Those are some of the longer-term questions that the state is grappling with. The governor stood up the Future of Work commission 18 months ago to grapple with some of that. There will be a report coming out relatively soon about that, and really trying to create a process.
You know, there are no short-term answers to this. There’s no silver bullet, and there are a lot of stakeholders: business, labor, consumers, employees. And there are many, many sectors it affects. Coming from Warner Bros., musicians were an interesting subset. I think that’s a longer-term conversation.
Q: The other thing we’re hearing a lot of are these really familiar frustrations with the state’s high costs and strict regulations, pushing some businesses and residents to look at moving out of state. Do you think talk of a California exodus is overblown, or are there ways that you’re currently working to head off that migration?
A: Yes and yes (laughs). I think it’s overblown. My husband is a journalist. I’ve said this a million times, but he always says in journalism three’s a trend. You get HPE, Elon (Musk) and Larry Ellison, and all of a sudden, everyone’s leaving California, but there still somehow manages to be almost 40 million people who are still here. But look, that said, they’re not the only ones.
The tax question is an interesting one. First of all, the governor has said he’s not gonna raise personal income taxes. There will be no wealth tax. No increase in corporate taxes this year. Off the table. That’s not something that has seemed to penetrate. The other thing is this idea that California taxes are so high. Well, the top marginal rate is high. But the actual tax burden for the average person is like 10th-lowest in the country.
I think we need to both address the things that make it difficult for businesses and remind people why certain things are the way they are. Business, I mean, they get it. They don’t need us to tell them about the advantage of being here. They wouldn’t be here. That’s not to say there aren’t other challenges. The cost of housing is high. We need to continue to address that. Transportation is something we all think about. Continuing to dig into those problems and try to figure out new solutions, creative solutions, is really important.
Q: On bigger issues like housing construction and electric vehicle infrastructure, those are both included in the governor’s budget proposal for economic recovery. But some business owners I talk to say those aren’t things that will help businesses directly right now. How do you think about balancing the short-term needs during a crisis, versus these longer-term trends that are playing out?
A: You do absolutely have to do both. For the short term, that’s why you see $4.5 billion in the governor’s budget for immediate relief. It’s really helpful that the federal government is also prioritizing that they also want to go to 100% clean energy. It’s like great, we’re in, let us show you some of the things that we’ve learned, and why don’t you invest some more of that money here?
In the short term, we have learned that there’s an additional $10 billion in surplus. Some of it’s earmarked for other things, but the rest of that money will go to helping in the immediate term to restart the economy and to get us through the pandemic. Longer term, there’s also things in the budget and in the governor’s plans, (including) $1.5 billion for zero-emissions vehicles, which creates jobs and creates opportunities but also meets our climate goals.
Q: Communicating public health guidance that’s constantly changing isn’t easy, but the governor has developed a unique vernacular for doing it. Do you think California is meeting the moment in this respect, or are there ways the state could do this more effectively?
A: You can always improve, right? But I think on balance, California is doing better than maybe the public realizes. Not that there haven’t been some stumbles and missteps, but we’ve now distributed 5 million vaccines. That’s substantially more than any other state. That’s one good example of how I think the governor’s meeting the moment.
We’re in, I don’t know, the fifth inning of this? The sixth inning? At the end of the game, there will be a score. Judge us by that.
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